SBV Directive 9608 Forces Deposit Rate Cuts: VCB and Vietnamese Banks

Overview

On 18 October 2026 the State Bank of Vietnam issued Directive 9608/NHNN-CSTT, ordering credit institutions to cut listed deposit rates by at least 0.5% per year on terms of six months or more and lending rates by 1.5-2% per year for manufacturing, business and priority sectors. The directive carries explicit sanctions tied to 2026-2027 credit growth quotas, a sharper enforcement mechanism than earlier verbal guidance. Vietcombank (VCB) and at least 18 other banks cut deposit rates within two days, though VDSC expects deposit rates to stabilize rather than fall deeply in 2027.

Key Facts

• Directive 9608/NHNN-CSTT was issued 18 October 2026 and took effect immediately, with no transition period.
• Minimum deposit rate cut: 0.5% per year on tenors of six months and above.
• Lending rate cut for manufacturing, business and priority sectors: 1.5-2% per year.
• At least 19 banks cut deposit rates on 19-20 October 2026, commonly by 0.5 percentage points per year.
• Non-compliant institutions may have remaining 2026 credit growth quotas reviewed, receive lower 2027 quotas, or face higher capital adequacy requirements.
• Deposit growth reached 11.22% as of 14 October 2026 against credit growth of 11.44%, narrowing the funding-credit gap from a mid-year peak of about VND 2.80 quadrillion to roughly VND 2.35 quadrillion.
• That gap remains equivalent to early-2026 levels and double early-2025 levels, per VDSC.

What Happened

The State Bank of Vietnam issued Directive 9608/NHNN-CSTT on 18 October 2026, requiring credit institutions to lower listed deposit rates by at least 0.5% per year for tenors of six months and above, and to reduce lending rates by 1.5-2% per year for production, business and priority sectors. The directive also tightens credit discipline and risk management. Its distinguishing feature is enforcement: banks that do not comply may see their remaining 2026 credit growth quota reconsidered, be assigned a lower 2027 quota, or be required to apply capital safety ratios above regulatory minimums.

Banks responded quickly. Over 19-20 October 2026, at least 19 institutions cut deposit rates, typically by 0.5 percentage points per year. VDSC assessed the directive as having more substantive impact than previous guidance from the Governor, because the sanctions are written into the document and tied directly to 2026-2027 credit growth limits. At a 19 October meeting with credit institutions, the Governor said rate reductions should be considered for both existing outstanding loans and new lending, while funding costs decline only as older deposits mature.

Market Context

VCB trades on HOSE at VND 56,800 as of 25 October 2026, with BID at VND 34,250, CTG at VND 30,950 and TCB at VND 34,200. The directive lands with most large joint-stock banks already near their credit growth ceilings, and several above quota once outright L/C balances are included, which reduces their need to raise deposits for liquidity. VDSC retains a cautious near-term view on the banking sector and prefers banks with high CASA ratios, thick non-performing loan coverage and limited reliance on outright L/C operations.

Strategic Significance

The arithmetic is the core issue for investors: lending rates are directed down 1.5-2% while deposit rates fall only 0.5%, compressing net interest margins in the near term and differentiating outcomes by funding mix. Banks with cheap CASA deposits and ample loss buffers can absorb the squeeze better than those dependent on term deposits and outright L/C business. The structural funding shortfall of roughly VND 2.35 quadrillion limits how far deposit rates can fall in 2027, so the directive caps rather than reverses the cost of funds. For VCB and large state-owned peers, the policy trades margin for volume stability and quota certainty.

What to Watch

• Third-quarter 2026 earnings releases from VCB, BID, CTG and TCB, showing net interest margin trends.
• SBV credit growth quota allocations for 2027, expected late in the fourth quarter.
• Deposit rate movements through December 2026, to confirm VDSC’s flat-to-stable expectation.
• Disclosure of any institution sanctioned under Directive 9608, and the form of penalty applied.
• Monthly SBV data on deposit and credit growth, tracking whether the VND 2.35 quadrillion gap narrows.